To Wait or Not to Wait? Use of the Flexibility to Postpone Investment Decisions in Theory and in Practice

Morreale, Azzurra; Mittone, Luigi; Vu, Thi-Thanh-Tam; Collan, Mikael

doi:10.3390/su12083451

Cited by 3 publications

(3 citation statements)

References 47 publications

(56 reference statements)

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“…practices that support long-term economic growth without negatively impacting social, environmental, and cultural aspects of the community Source: Own study based on [9] (pp. [21][22][23][24][25][26][27][28][29][30][31][32][33][34][35][36][37][38][39][40]; [10] (p. 1).…”

Section: Economicmentioning

confidence: 99%

Perception of Social Responsibility Strategy in Higher Education: Empirical Study in Poland

2021

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Today, the role of universities in the education of future managers who promote the principles of social responsibility (SR) and CSR in business practice is pivotal. Properly educated management staff of organizations can disseminate knowledge on this subject and apply its principles in practice. The research scope of the paper is to identify the knowledge and perception of the University Social Responsibility Declaration (Polish national programme in this field, hereinafter called USRD) among the students of the University of Economics in Katowice. The research assumes that most of the students do not have any knowledge about such programs as the USRD, and that despite this, they see the need for implementation of the specific principles of the USRD into university’s activities. Significance of specific principles is associated with students’ sociodemographic and psychographic characteristics. The strongest relation between the perception of the importance of the objectives of USRD and students’ characteristics is observed in the declared extent to which respondents implement the principles of social responsibility in their everyday life, as well as in their age and year of study. The more the students use those principles, the higher they personally rate specific principles of the USRD.

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Section: Economicmentioning

confidence: 99%

Perception of Social Responsibility Strategy in Higher Education: Empirical Study in Poland

2021

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“…This instrument allows managers to add strategic value to firms and helps them to make more informed decisions in the future. Therefore, an option-based approach is a representation of the decision process as managers can decide to invest in digital technologies or just to wait until a more favorable scenario [10][11][12].…”

Section: Introductionmentioning

confidence: 99%

“…• 100 = 215%), the strategic value that entails having the real option to learn supposes only 5.5% of the total investment profit. According to Morreale et al [11], managers change their mind when the value of the option is higher or when the waiting time is shorter as they recognize the value of waiting. However, the option value from this study's results can be considered low in comparison to the high rate of return.…”

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confidence: 99%

Assessing Blockchain Investments through the Learning Option: An Application to the Automotive and Aerospace Industry

2020

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Blockchain technology has demonstrated huge potential in providing simplicity and efficiency for different industries. However, its implementation in the automotive and aerospace industry is quite slow because of its difficulty to show value creation. Real option methodology, specifically the learning option, is an assessment tool which fits the conditions under which investment in blockchain technology is carried out. Thus, its application can help managers to wisely invest in this technology despite the complexity of this industry. This study offers a suitable tool to assess the strategic value of an investment in blockchain technology from a conservative position by using the real option approach, particularly the learning option. Specifically, this paper provides the mathematical expression to obtain the value of a project which includes the learning option for n periods. Likewise, it tries to raise awareness among managers of the importance to gather relevant information before making irreversible decisions. The results show that, despite the high profitability of the analyzed sector and the strategic value added by the learning option to the investment, the value of this option remains constant over the project lifespan. This indicates that the blockchain investment has to be implemented as soon as possible given that it is a highly profitable project whose value increases very slowly by waiting to get more new information. In this way, the immediate investment in blockchain technology in the automotive and aerospace industry is recommended to reap the competitive advantages offered by digital technologies.

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Optimized Expansion Strategy for a Hydrogen Pipe Network in the Port of Rotterdam with Compound Real Options Analysis

et al. 2021

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The port of Rotterdam is the largest seaport in Europe. To maintain its position, the harbor will have to anticipate global transitions such as transferring to sustainable energy. Hydrogen is seen as a promising energy carrier; however, future demand is uncertain. The current research investigates decision making under uncertainty and values flexibility. Compound real options analysis is applied to optimize the time-variant expansion strategies for a hydrogen pipe network. The trade-off between early investments and missed revenues when not investing in time determines the optimized expansion strategy. Moreover, the real options approach also provides the levelized unit price for hydrogen distribution, to cover the life cycle costs of the optimal expansion strategy. Finally, this real options approach offers flexibility to a decision maker as it allows for enhancing future decisions. The academic contribution of this research is a distinct perspective on a compound real options approach where the optimal strategic path is the key result of interest. This in contrast to other real options applications in the literature which focus on option value, exchange with limiting the options or do not visualize a strategic path. Moreover, this research demonstrates how stepwise expansion and decision making under uncertainty facilitate transitions such as the transition toward clean energy.

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To Wait or Not to Wait? Use of the Flexibility to Postpone Investment Decisions in Theory and in Practice

Cited by 3 publications

References 47 publications

Perception of Social Responsibility Strategy in Higher Education: Empirical Study in Poland

Perception of Social Responsibility Strategy in Higher Education: Empirical Study in Poland

Assessing Blockchain Investments through the Learning Option: An Application to the Automotive and Aerospace Industry

Optimized Expansion Strategy for a Hydrogen Pipe Network in the Port of Rotterdam with Compound Real Options Analysis

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